Average Consumer Price Index (CPI) inflation expectations for 2010 continued easing in the second quarter of the year, falling moderately from 6.5 percent to 6.3 percent.

This, according to the results of the Bureau of Economic Research (BER)'s inflation expectation survey for the second quarter of 2010, released on Tuesday and commissioned by the SA Reserve Bank.

The fall followed a 1.0 percentage point decline - from 7.5 percent to 6.5 percent - in expectations during the first quarter of 2010.

After decreasing from 7.7 percent in the fourth quarter of 2009 to 6.7 percent in the first quarter of 2010, average CPI inflation expectations for 2011 fell by a further 0.2 percentage points to 6.5 percent in the second quarter of 2010.

CPI inflation expectations for 2012 remained unchanged at 6.8 percent, BER said.

It said analysts revised their inflation expectations for 2010 by the most at 0.5 percentage points, from 5.5 percent in the first quarter of 2010 to 5.0 percent in the second quarter of the year.

Business people lowered their 2010 inflation expectations by 0.2 percentage points to 6.9 percent, while trade union officials left their forecast unchanged at 7.0 percent.

Identical to the previous survey, analysts were the only social group that expected inflation to remain within the 3,0 percent to 6,0 percent SA Reserve Bank target band during the entire forecast period.

BER said business people forecast inflation at 6.9 percent and trade union representatives at 7.0 percent.

Business people also anticipated the highest inflation for 2011, at 7.2 percent, and 2012, at 7.4 percent.

"On average, inflation is expected to accelerate over the forecast period, rising from 6.3 percent (2010) to 6.8 percent in 2012," the BER said.

Analysts and business people saw inflation bottoming during 2010, before increasing over the remainder of the forecast period.

Trade union officials expected inflation to dip again in 2011 (to 6.7 percent) before accelerating once more in 2012.

Similar to the other social groups, households also revised their inflation forecast for 2010 downwards, from 8.4 percent during the first quarter of 2010 to 8.3 percent in the latest survey.

"Overall, there were slight improvements in the inflation outlook for 2010 and 2011, while 2012 remained unchanged relative to the previous survey," BER said.